Customer Relationship

Management (CRM)

• VRMA National Conference

• San Francisco October 16 - 20
Moderator
Jim Kempski – Specialty Lodging
Speakers
Paul Herman – Visual Data Systems
Ed Ulmer – Barefoot Technologies
CRM
 What Is “CRM”

 Customer Relationship Management

 Becoming a common and important concept
in many industries
 Beyond mere ‘Contact Management’
 Most industries have CRM software to help
sales process, on-going service, and even
accounting
 The Value of CRM

 Gain more control in interaction with

customers
 Manage expectations better
 Understand what customers really want
 Provide products that better serve customers
 Increase trust
 Competitive advantage
 A Working Definition…

 “The Plan and Practice of managing the

lifetime relationship with your customer.”
 “The Plan”: Every successful endeavor

requires proper planning. Successful CRM

rarely happens by chance. Many
organizations jump to implementation w/o
proper planning.
 A Working Definition…

 “The Plan and Practice of managing the

lifetime relationship with your customer.”
 “The Practice”: Systematic

implementation of your plans. Should

produce measurable results. Should be
evaluated and refined over time.
 A Few Basic CRM Concepts…

 Touch Points
 Each time your company interacts with a
customer is a touch point.
 Can we name a few Guest Touch Points?
 How about Owner Touch Points?
 Guest Touch Points

 First Call/Internet Visit

 Lease
 Pre-arrival
 Check-In/Check-Out
 Post stay thank you
 Newsletters, Interest Lists
 Housekeeping/Maintenance
 All marketing materials
 Owner Touch Points

 First Call/Internet Visit

 Original purchase of property
 Rental listing
 Any owner stays in property
 Every month’s owner statement
 Newsletters
 Owner get-togethers
 Any phone call – positive or negative
 Any marketing information that the owner may see
 Touch Points

 Are they planned? Managed? Documented?

 Are all “touchers” properly trained? Enroll
your complete staff in the vision.
 Any way to increase the effectiveness of the
touch?
 Any way to increase the number of touches?
 A Few Basic CRM Concepts…

 Market Segmentation
 Do you treat all of your guests the same?
 Are they?
 Consider the difference between a guest that stays once
ever in a 2 bedroom cottage and a guest that has stayed
each of the last 10 years in a 6 bedroom home
 We shouldn’t treat the one-timer badly, they may come back
many more times
 We should realize that the higher value guest deserves the best
that we can offer.
 A Few Basic CRM Concepts…

 Market Segmentation
 Do you treat all of your Owners the same?
 Are they?
 Consider the difference between an owner that has one
1970’s motif 2 bedroom condo and an owner that has 3 8
bedroom oceanfront homes
 We shouldn’t treat the condo owner badly, they are in your
program for a reason (right?)
 We should realize that the OF home owner deserves the best that
we can offer.
 Market Segmentation Examples

 Saks Fifth Avenue

 High value customers ($2000/yr) are routed to special
CSR’s.
 The calls are routed such that a high value customer is
connected to a CSR in one second or less.
 Could we coin a new acronym here:
 HVG – High Value Guest?
 HVO – High Value Owner?
 Guest Segmentation

 Can you use your guest history information to see:

 Your most valuable repeat guests?
 Those who tend to rent last minute?
 Those who look for a deal?
 Those who like packages?
 Those who rent early?
 Those who like new construction?
 Guest Anniversarys/Birthdays
 Interests (e.g. fishing, windsurfing)
 Owner Segmentation

 Can you use your owner/property

information to see:
 Those who work well with staff?
 Those who don’t?
 Which homes are performing?
 Can you rank them?
Information Regarding Your
Customers…
 Do Not Call Regulation

If your client is on the Do Not Call Registry

 If you have done business, you can call for
up to 18 months
 If they only called, you can call them for up
to 3 months
 Fine can be up to $11,000 per incident
 General Statistics

The average business never hears from 96% of its unhappy customers,
 91% never come back
 Those people will tell a minimum of 4 other people,
 Getting a repeat customer from this group is 1 in 11,
 Dissatisfied customers may tell 9-10 people about their experience,
 For every positive they tell 4-5 people,
 For every complaint received the average business in fact has 26 customers
with the similar concern,
 General Statistics…

 Of the customers who register a complaint, as many as 70% will do

business again with your organization if the complaint is resolved
effectively,
This figure goes up to 95% if the complaint has been resolved quickly,
 40% of complaints are the result from customer mistakes or incorrect
expectations,
 A complaint that is handled efficiently is actually better than no
complaint at all,
Customers who complain and get satisfactory results are 8% more loyal
than if no complaint at all,
Why customers quit-how to win
customers and keep them for life

 1% die
 3% move away
 5% develop other friendships
 9% leave for competitive reasons
 14% are dissatisfied
 68% quit because of an attitude of
indifference
 Vacation Rental from NAR
There are 7 million vacation rental homes in the US.
 84% of second homeowners never rent their property.
 This makes up 15% of the market
 The average age of a second homebuyer is 47 years old.
 While the median age of all existing second homeowners is 61.
 Existing owners have held their property for a median of nine years. .
 The median distance from the owners’ primary residence and the vacation
rental home is 185 miles.
a. 1/3 are more than 500 miles,
b. 1/3 are less than 100 miles.
 Vacation Rental from NAR

This is important information on where you should be marketing too

 For rental and sales-as most purchasers of second homes
 Will first rent and then move into a sale.
Every company should be able to do there own profile and get this
information.
 Harrah’s CRM Initiative

Goals
 Move from a stand-alone operations to one unified company
 Encourage customers to spend a larger portion of what they spend
directly with Harrah’s
 Encourage unified brand spending
 Harrah’s Data Analysis

 1997 a loyalty program was initiated

 Data is gathered at all points of sale
 1998 they started mining and analyzing the data the found:
 A Harrah’s customer only spent 36% of gaming dollars with them
 26% of their customers produced 82% of revenue
 “Best” customers were NOT the high rollers
 They are slot playing middle aged folks, retired teachers, bankers and
doctors with time and discretionary income
 They often did not stay at the hotel, but visited in the evening to game
 The reason that they visited was the anticipation and excitement
 Harrah’s Plan

 Decided to consolidate strategy around the choice customers

 Changed marketing message to focus on the excitement of gaming
 Used quantitative models to determine the lifetime value of the customer
 A happy customer will increase spending by 24%/year
 An unhappy customer decreases spending by 10%
 Increased cross-market play from 13% in 1997 to 23% in 2000
 CRM Process Summary
Prospect/Tenant

Prospect calls
-Interests and uniqueness
-Time frame
-How Heard
MONITOR MARKETING TO GET THE BOOKING

Why did we loose-did not reserve Booked by Prospect-turns to tenant

LEARN FROM MISTAKE -know there likes-so up sell, on and off site
SALVAGE THE SALE -keep track of all conversations-so you show you care
-Manage the survey
KEEP THEM HAPPY AND WIN THEM FOR THE NEXT TIME

Tenant tells a Friend Tenant Rebooks

Tenant Buys
-know where came from dates-anniversary, wedding
GET A SALE AND A NEW OWN
REFERAL RESERVATION Special needs
Last Minute deals
REPEAT RESERVATION

Owners
Owner/Tenant Friend buying Owner Buying Another Owner Selling Management
REPEAT SALES Helping rent units
Likes and dislikes details of comm. keep track of every call
REFERAL
REFERAL SALES REPEAT SALES Keeping track of issues
RESERVATION
KEEPS OWNERS HAPPY
 Summary

 “The Plan and Practice of managing the

lifetime relationship with your customer.”
 Touch Points
 Market Segmentation
 Data Collection
 Data Analysis
 Understanding Your Customer
 Questions???

http://www.vdsys.com/vrma2004
Paul: paulh@vdsys.com
Ed: ed.ulmer@barefoot.com